RE:AldanHi Idleweiss,
there are different ways of implementing hedging or fix price strategies. As far as I know, most O&G companies use a hedging strategy that is decoupled from physical deliveries.
Let's use your example above and let's assume a company hedges 10,000 mcf/d for 3 months.
For example: The company sells and delivers its gas to AECO and gets 8 CAD per mfc/d this results in revenue of 80,000 CAD per day.
At the same time the company hedged 10,000 mcf/d for 4 CAD. In this case the company has to pay the difference of the current market price 8 - 4 = 4 CAD to the other party and is realizing a loss per day of 40,000 CAD.
Ultimately, the company gets exactly the price (4 CAD) it hedged for!
It works the other way around as well. If the marketprice is 2 CAD the numbers are
Revenue 2 CAD * 10,000 mcf/d = 20,000 CAD
This time the other party has to pay the company 4 - 2 = 2 CAD = 20,000 CAD
Again, the company that hedged receives 40,000 CAD.
I have simplified it, but I hope this helps!
Ultimately, realized hedging losses usually means you have to pay out hard earned cash to different party.